OMRI DAILY DIGEST
No. 56, 19 March 1996
HUNGARIAN SMALLHOLDERS' RALLY PROVOKES RANCOR. The two governing-party
caucuses are considering concrete measures against the opposition
Smallholders Party (FKGP) in reaction to a harsh anti-government speech
by FKGP Chairman Jozsef Torgyan last week, Hungarian media reported. In
his speech, the populist Torgyan labeled ruling political elites
"disgusting pseudo-liberal worms and vultures that have inundated [our]
country" and added that "as spring is coming, it is time for Hungarians
to launch a 'de-worming' campaign." Torgyan also called on the cabinet
to resign and promised to create a "Canaan of milk and honey." The
socialist-liberal coalition and the opposition Young Democrats
explicitly dissociated themselves from Torgyan's tone, saying it was
inadmissible in a parliamentary democracy to describe the advocates of
an internationally accepted political trend as worms and vultures. The
Socialists suggested an end to all parliamentary cooperation with
Torgyan and his party. The coalition liberals oppose such a move,
arguing that it would grant Torgyan a wider opportunity to attack the
governing parties. -- Zsofia Szilagyi
[As of 12:00 CET]
Compiled by Tim Rostan

Wednesday, 20 March 1996 Volume 1, Issue 312
REGIONAL NEWS
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> ------------------------------------------------
HUNGARY URGES ROMANIA TO BE FLEXIBLE OVER TREATY
> ------------------------------------------------
Hungary has welcomed Romania's desire to conclude a long-delayed
treaty between the two neighbours soon, but says Bucharest has
shown little fexibility in negotiations. Romanian Foreign
Minister Teodor Melescanu said on Friday Romania wanted the
basic treaty to be signed before elections this year to take
defuse minority rights as a political issue. Although Hungary's
Foreign Ministry spokesman Gabor Szentivanyi welcomes the
intentions expressed in public statements, his government
reamins cautios because he says Romania has shown less
flexibility at the negotiating table. Talks collapsed last year
because of differences over the rights of 1.6 million ethnic
Hungarians in Romania, mainly in Transylvania which was part of
the Austro-Hungarian empire until 1918. but negotiations are
expected to resume soon. In part, because a bilateral treaty is
seen as vital to both countries' ambitions to join the European
Union and the North Atlantic Treaty Organisation.
BUSINESS NEWS
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DRUZHBA OIL MAY RESUME WEDNESDAY
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Russian oil supplies via the Druzhba (Friendship) pipeline are
likely to resume later today after a two-day disruption.
Yesterday, Russian and Ukrainian oil officials held talks in
Kiev to try to settle the dispute over transit fees via
Ukraine's part of the pipeline a day after oil flow was
disrupted to customers in Hungary, the Czech Republic and
Slovakia. Ukraine in January raised the levy for Russian oil
transporation through its territory by 10 percent to $5.20 per
tonne of oil. According to one official close to the talks,
Russian suppliers to Hungary are refusing to pay Ukraine's
transit fees, which could prevent supplies being renewed
immediately to that country.
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HUNGARIAN WAGES TO TRACK INFLATION
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Hungarian wages will track inflation within a two-percent margin
in 1996, Prime Minister Gyula Horn told a news conference on
Tuesday. Horn readily admitted that his government has made
mistakes in explaining properly the inevitability of the
austerity measures to the population. The austerity measures of
the Socialist-Free Democrat government resulted in a 10 percent
fall in real income for Hungarian wage-earners in 1995. .
Nevertheless, Horn says the government is determined to follow
its economic agenda.
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EGIS TO BENEFIT FROM REFORMS
----------------------------
Hungarian pharmaceutical company Egis Gyogyszergyar Rt will
benefit from health reforms and higher sales of generics,
according to an analyst report which rates the shares a "buy".
Rupert Foster and Anthony Vago, analysts for Bank
Austria-GiroCredit say Egis is set to benefit from current
health reforms where increasingly burdened national health
systems are favouring generic products over more expensive
imported products. France's Servier S.A. acquired a 51 percent
stake in Egis, the third largest Hungarian pharmaceutical
company in terms of sales and the largest in terms of domestic
market share, which is 13 percent. The Bank's report claims the
strategic alliance, struck last December, should pave the way
for strong growth in Egis' earnings, through access to more
markets in the West, improved research capabilities through
cooperation and expanded product range. The company seems to be
benefiting from the reforms already as it closed at an all-time
high of 5,580 forints, up 30 on the Budapest Stock Exchange.
> -----------------------------------------------
SWISS COMPANY TO SELL MALAYSIAN CARS IN HUNGARY
> -----------------------------------------------
Swiss-based motor vehicle trader Emil Frey AG is to start
importing and selling Malaysian-built Proton cars in Hungary.
Jurg Fassler, Emil Frey's director for central and eastern
Europe, beleives to succeed in Hungary, Proton will have to
compete with cars from South Korea. Frey, which started
selling Protons in the Czech Republic last week, already
operates the Chrysler importer and a Toyota dealer in Hungary.
Frey sold roughly 2,000 Protons last year in Germany, but would
not reveal an projections for Hungary.
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